Written By Sharleen Dsouza

Billionaire Radhakishan Damani just entered Jeff Bezos’ turf.

His supermarket chain D-Mart is running a pilot that allows customers to order online, and have everything from staples to shampoos either delivered at neighbourhood kiosks free or at their doorstep for a fee. India’s most valued retailer has set up 40 such booths in Mumbai.

We have started a pilot run in a small part of Mumbai and will expand after understanding consumer response to this service. Neville Noronha, Managing Director, Avenue Supermarts Told BloombergQuint While it’s a pilot, D-Mart’s scale could be a big advantage when rolled out across its network of 140 outlets in 10 states. Damani is betting on the ‘everyday low prices’ model that made him a billion

While it’s a pilot, D-Mart’s scale could be a big advantage when rolled out across its network of 140 outlets in 10 states. Damani is betting on the ‘everyday low prices’ model that made him a billionaire in a blockbuster initial public offering of Avenue Supermarts Ltd. in March. Shares have since gained nearly fourfold.

It’s also what Amazon is trying in Seattle to compete with Wal-Mart with its “click-and-collect” kiosks. That followed its $13.7-billion Whole Foods buyout, aimed at disrupting the brick-and-mortar grocers in the U.S. The American online giant has similar plans for India, having got clearance to invest $500 million in food retail. D-Mart joins Flipkart that resumed online grocery sales to counter

D-Mart’s kiosks are located at places where the supermarket chain doesn’t have outlets. Customers can pick up products ordered online—both through the app and the website—at the booths. For home delivery, they will have to pay 3 percent of the bill or Rs 49, whichever is higher. “This is D-Mart’s way of capturing an extra share of its existing customers’ wallet,” Devangshu Dutta, chief executive

It’s an experiment all retailers are trying to increase their turnover. Also, if a delivery cost is involved, it becomes a deterrent for the consumer to shop online,” said Arvind Singhal, chairman of retail consultant Technopak Advisors. Also, D-Mart is not an aspirational brand, he said.

Online grocery shopping in India is relatively small; it will take a while before anyone cracks the code.

Source: bqprime

Written By Ratna Bhushan & Chaitali Chakravarty, ET Bureau

NEW DELHI: Top Indian retailers are furious at Amazon over what they see as ambush marketing — inside their own stores no less. Amazon has said the exercise was part of normal promotional activities.

The India arm of the American online giant bundled its gift coupons with products of ITC, Nestle and Coca-Cola being sold on the shelves of large organised retail chains such as Big Bazaar, Hyper-City, Star Bazaar, D-Mart, Walmart-owned Best Price Modern Wholesale, Big-Basket and others. Not anymore it seems — the brick-and-mortar retailers are removing the items as they see this as a move by Amazon to acquire their customers.

“We will not allow ambush marketing at any cost,” said Kishore Biyani, founder of Future Group, the country’s largest brick-and-mortar retail network. “We have started removing such products from the shelves and told brands not to supply us packs that have any promotional tie-up with a rival retailer.”
Packs of brands such as ITC’s Yippee Noodles, Nestle’s KitKat chocolate and Coca-Cola’s Sprite and Fanta soft drinks are among the brands that are, or were, being retailed at offline stores along with Amazon gift coupons. D-Mart chief executive Neville Noronha described the move as being “below the belt.” He added: “Principally, the brands should have spoken to us. Amazon is using us as a channel to acquire customers without any agreement with us. We’ve communicated our point of view to the brands.”

Amazon founder Jeff Bezos has pledged to pump $5 billion into India and has said it will continue to invest and grow in the country. It’s now focused on selling food and grocery online with deals and promotions and has earmarked $500 million for this after the government allowed foreign direct investment in the retailing of such items, provided they are made and packaged in India.

The marketplace said the exercise was part of its promotion. “Amazon regularly runs various kinds of promotional activities with sellers and brand partners in keeping with its vision to make online commerce a part of everyday life,” a company spokesperson said in an email.

FMCG Cos Neutral
The consumer goods companies adopted a neutral tone. Nestle said: “We value our relationship with all our trade partners and collaborate with them for our promotions. In the recent KitKat promotion, there are some operational issues and we are in touch with our partners.”

A spokesperson for ITC, which makes a host of packaged foods and grocery products including biscuits, noodles, frozen foods, soaps and deodorants, said: “Like every FMCG (fast-moving consumer goods) company, we run different consumer promotion schemes across multiple products from time to time to benefit consumers and promote the sale of our offerings. Currently, there are 38 promotion schemes across multiple products.” There was no response from Coca-Cola.

Rakesh Biyani, joint managing director of Future Retail, said it was disappointing that large companies like Amazon were directly incentivising consumers with currency/money, which is equivalent to indirect participation in pricing. He said such marketplaces aren’t allowed to do this. “The act of promoting a specific distribution channel through a cash incentive on products sold through traditional distribution is not good for the growth of the industry,” he said. “Small traders and retailers will be significantly impacted from a promotion, which is incentivising consumers to shop in a competing channel.”

Analysts said the episode reflected the intense competition.

Not a new practice
Globally, companies have long engaged in cross-channel promotions and ambush marketing, consulting firm Third Eyesight chief executive Devangshu Dutta said. Such practices may not be unethical unless specified in the contract.

“Having said that, offline retailers are fully within their rights to return the packs they take objection to,” he said. “Finally, smaller retailers which contribute the much bigger segment of sales may not be able to take a stand which the bigger, organised ones are taking.”

This is not the first time Amazon and brick-and-mortar retailers have been engaged in a bitter battle over discounting and pricing strategies.

Large e-commerce players, which are known to burn cash to acquire customers, have been frequently alleged to indulge in predatory pricing by offline retailers. In the middle of last year, the government had issued guidelines on marketplaces aimed at putting an end to deep discounts offered by online platforms, a move that brick-and-mortar retailers said levelled the playing field.

While online penetration of food and grocery penetration is still less than 1%, Morgan Stanley expects this to become the fastest-growing online category, expanding at a compounded annual growth rate of 141% by 2020 and contributing $15 billion, or12.5%, of overall retail sales.

Source: economictimes

Written By Sulekha Nair

People have become more realistic and know what a structural reform is. But the fire and chutzpah in Narendra Modi’s speeches now do not seem to evoke the same euphoria as earlier

Notwithstanding the policy decisions such as demonetisation and a hurried rollout of the goods and services tax (GST) that have negatively impacted a large populace in the country, Brand Narendra Modi seems to be largely untouched as of now. However, with the situation on the ground remaining bleak, it remains to be seen how long can he hold on to the image, aver experts.

Perception of Brand Modi, when Narendra Modi was freshly elected as the Prime Minister, was that of a bold and courageous leader who people expected to bring about sweeping changes. Brand experts say that it was an unrealistic expectation but frustrated by the policy paralysis of the UPA government, voters expected Modi to bring about the achhe din that was his poll promise.

But despite the sweeping changes that have put many of the country’s poor in deep trouble, the brand Modi remains undented. However, perception of Brand Modi is an individual opinion and may differ in tandem with the ground reality. Experts aver that though there is a bit of ‘apprehension’ on the growth front, the country is on the right track.

Brand Modi is intact, argues Arvind Singhal, Chairman and Managing Director, Technopak Advisors, a Delhi-based management consultancy firm, as any decision which is seen as negative by certain sections like demonetisation is on par like any decision taken by a Chief Executive Officer or Managing Director of a blue chip firm. “Some decisions may not work out. It is same for the prime minister too. But that does not mean the intentions were not right,” he says.

Steps taken by Modi were to stop leakages and if some of them did not, it is due to high expectations of the public, counter some. “You don’t expect a magic wand to take away all the issues that ails the country and has been not just the making of this government,” they say.

When PM Modi was talking about his government’s policy decisions on Wednesday during the inauguration of the Golden Jubilee Year of the Institute of Company Secretaries in New Delhi, was he a tad too defensive? Harish Bijoor, Chief Executive Officer of brand and business strategy firm Harish Bijoor Consults Inc, is emphatic that Modi was anything but defensive. He points to the PM’s body language which exuded confidence just like his speech where the tone and tenor was like that of a prime minister than a prime ministerial candidate of the past. “There was a great deal of sobriety and realism about the position he handles and the size of the economy,” he said.

People have become realistic over time, feels Santosh Desai, managing director and CEO, Future Brands, and understand that structural reforms take a longer time. The fire and chutzpah of Modi’s speeches do not evoke the same kind of euphoria that it evoked in his listeners as before though, he admits, but says that his charisma is intact. “There is a sense that there is no alternative to Modi as a leader,” he says, cautioning that it is too premature to write off Brand Modi.

GST, demonetisation a dampener

The longevity of Brand Modi will depend on how the government fares in the next few quarters, sector experts say. However, there are grievances on the ground, especially with small and medium businesses (SME) and entrepreneurs who have been impacted by the GST. There are issues with the telecom policy and GST, which an entrepreneur (speaking on conditions of anonymity) felt was skewed in favour of the big industrialists. “We were able to do business for which the big industrialists charged heavy fees. By bringing us into the GST ambit, we have been dealt a heavy blow,” he said.

Small businesses are heavily reliant not only on cash as currency but business for cash flow. On paper, the policy says that anyone who has a business below Rs 20 lakh in revenues does not have to apply for a GST number, but when you do business across state borders you do need to have one. The buyer may pay well after the invoice is raised, which means you would be paying for GST from your pocket. In effect, as a small entrepreneur, you bear the GST cash outflow apart from giving a long credit line to your customer which is usually not financed by banks since they are loathe to give loans to small business. GST is fantastic for transparency and compliance but the cost for the latter is high especially for small businesses, say sector experts.

Media and the stock market cover perhaps only the top five percent which are individually large businesses, says Devangshu Dutta, chief executive of Third Eyesight, a consulting firm. The reality is that 95 percent of businesses are small and are major contributors to the economy, he says.

“Larger businesses can have manpower solely for compliances, but small businesses do not have that luxury. For the entrepreneurial spirit of this community of small businesses to be unleashed, the number of points of government compliance touch-points must be reduced,” he says.

Brand Modi will have to look at the grievances of small and medium businesses and entrepreneurs who form the backbone of the economy, sector experts said.

Source: firstpost